It has taken years, but after votes in the Senate and House of Representatives last week, Australia has a Modern Slavery Act.

It’ll take effect on January 1, 2019.

But what difference will it make?

First, what is modern slavery?

Britain abolished slavery on its own soil in 1833. It abolished the most egregious forms of child labour a century later.

But slavery and child labour are still being used to make the products Britons buy, just as they are being used to make the products Australians buy.

Increasing integrated global supply chains have made it hard to tell whether even products that are stamped ‘made in Australia’ have at some stage used slaves or underage children as part of the production process.

Forcibly detained adults and children work in industries including fishing, cocoa, cotton, clothing, cannabis, construction and prostitution.

The term ‘modern slavery’ refers only to the worst forms of exploitation, and not to other serious breaches of human rights such as the denial of freedom of association or the denial of worker safety, such as at Rana Plaza clothing factory in Dhaka, Bangladesh, where more than 1,000 garment workers died when their building collapsed in 2013.

The International Labour Organisation believes 21 million people worldwide are forced labourers, half of them in the Asia-Pacific region.

What will be required

As with the British version of the Act, Australia’s will require businesses and other organisations above a certain size (consolidated revenue of $100 million) to report annually on the risks of modern slavery in their operations and supply chains, and the action they have taken to assess and address those risks, and the effectiveness of their response.

Smaller businesses will be able to report voluntarily.

To ensure high-level engagement, the statement has to be approved by the board of directors or equivalent and signed by a director.

The statements will be publicly available on a central register maintained by the government. The government itself, and those of its entities that satisfy the reporting revenue threshold, will also have to prepare a statement.

What will not be required

Two controversial omissions are penalties and independent oversight.

The government was unwilling to impose a penalty for failing to lodge a statement or for lodging an incomplete statement.

This needn’t be fatal. The requirement and the public register means companies that don’t report properly can be ‘named and shamed’ by non-government organisations. Consumer pressure can itself become a sanction.

In response to these concerns, Senate amendments have empowered the minister to name and shame his or herself, publicly calling out continued instances of non-compliance and reporting to parliament annually on compliance trends.

Australia’s parliamentary inquiry and a good many of the submissions strongly supported the appointment of an independent statutory anti-slavery commissioner with the authority and resources to oversee compliance.

The government will instead establish a departmental unit to help business address slavery risks and prepare statements.

The Labor party supports both penalties and the appointment of an independent commissioner.

It is possible both requirements will be in place before the first modern slavery statements are due on June 30, 2020.

NSW has also passed its own Modern Slavery Act, due to take effect after the Commonwealth Act commences. It imposes a lower revenue reporting threshold of $50 million, and provides for penalties for businesses that do not comply, of up to $1.1 million.

It also creates the post of independent NSW anti-slavery commissioner.

What now

American baseballer Yogi Berra said when we come to a fork in the road, we should take it. Wise advice. We have two ways forward and should take both. In truth, they converge.

First, we need to monitor compliance levels, and determine whether penalties and independent oversight are needed. And we need to set up processes that ensure the reports are of good quality.

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